Thanks to a long-time follower of this my blog for the heads-up. And thanks to Jim for some really good blogfodder.

Ya gotta give Jim credit, he goes down fighting. He claims by paying the chop for two of his customers, he gets to challenge the whole enchilada. So he pays $34K to challenge $42.1 million. Jim’s claim is that the penalty is divisible, as IRS toted his tab based on the 192 shelters he flogged.

First, Section 6707 says you have to register before you offer. And the penalty is imposed on failure to register before offering, not selling.

So IRS’ footing up the bill is merely aggregating what the customers invested and taking one percent thereof, per Section 6707(a)(2)(A). They must have ponied up half a billion.

Second, the Supremes don’t allow part payment in a money claim against the US of A. It’s the so-called “full payment” rule; cough up or shut up.

And USCFC’s mistake on which version of Sections 6111 and 6707 to apply was a mere clerical error, and didn’t divest USCFC of jurisdiction to insert the right versions in an opinion subsequent to Jim’s notice of appeal.

I hope Jim doesn’t quit after this. I need good copy on a Friday, which is also a Federal holiday, and after which I’ll be too weary after having marched two miles in America’s parade.

An author, teacher, advocate and trusted advisor, Lew Taishoff is a New York City-based attorney with 51 years of experience in corporate and individual tax and real estate matters. He is an Enrolled Agent, examined and admitted to practice before the Internal Revenue Service, and admitted to practice before the United States ... Continue reading →